“There is a tremendous demand from foreign investors to come to Colombia,” President Juan Manuel Santos said in a recent interview at the presidential palace. “We are the Latin American country with more foreign investment in relative terms. And there is more every day.”
At Frontier Strategy Group, a Washington-based company that helps multinational companies invest in Latin America, the focus has lately been on Colombia, along with economic stalwarts in the region, such as Chile.
Clinton Carter, head of Latin America research, said that there is still “an outdated mentality” about Colombia but that it is becoming easier to convince investors of the country’s possibilities. Frontier Strategy Group works with more than 200 Fortune 500 companies, the majority of which have substantial investments in Latin America.
Carter ticked off the advantages of Colombia: a free-trade agreement with the United States, its location in the center of the hemisphere, institutions that are more stable than in some neighboring countries and a well-trained workforce.
“It’s a sophisticated business community that places a premium on education,” Carter said.
ThyssenKrupp Elevator, a division of the German conglomerate, said Colombia is now its fastest-growing market in Latin America. The company is installing elevators and escalators in the country’s airport projects and newly built malls and is bidding on other projects, said Stuart Prior, the Texas-based chief operating officer of ThyssenKrupp Elevator.
“It’s a place we decided 10 or 12 years ago to invest in, and each year it got better and better,” he said. “We saw this coming five or six years ago.”
An expanding middle class
There remains, of course, another Colombia, one of want and violence.
Colombia is among the most inequitable countries in a region with the world’s highest income inequality.
And although the Marxist guerrillas here have been weakened, they still are a threat in remote states despite a long military offensive against them partly funded by successive U.S. administrations. In some regions, violence by drug traffickers or little-known but well-armed militias remains numbingly common.
But economists and government officials say that Colombia is lifting people from poverty and that the middle class is fast expanding. The evidence is plain to see — Colombians bought six times as many cars last year as a decade ago and also are stocking up on appliances and computers.
“It means that the Colombian families are capitalizing and that they have a higher income,” said Luis Carlos Villegas, director of the National Association of Entrepreneurs of Colombia. “I think the best income they ever had in our history.”
Santos said that nearly 1 million jobs were created in the past year and that a range of tax and other reforms are designed to cut into the income gap.
“If they work,” the president said of the policies, “then there is going to be a tremendous source of growth here in Colombia’s internal market.”
Among the companies taking advantage of the new economic climate is B.D. Promoters, a Spanish developer that is building a project in downtown Bogota that will include a mall, offices, a hotel and two towers, one of them 66 stories high.
Emilio Borrella, director of the company’s operations in Colombia and a native of Barcelona, said the company believes its project and others nearby will serve as a catalyst in the city center’s ongoing revival.
Speaking as he watched construction crews at work, Borrella said he and his colleagues from Spain, whose economy grew fast a generation ago, had “an incredible sense of deja vu” when they started working here.
“We had been searching for projects to develop all over Eastern Europe,” said Borrella, whose company came here in 2008. “But there was nothing that made us feel right. In Colombia, we didn’t even have to think twice. All we had to do was land and take a look.”